Microsoft is working to hijack Verizon Wireless' search deal from rival Google, according to a report in The Wall Street Journal.

The software giant is counting on Google's recent regulatory distraction in offering more generous revenue sharing and higher payments, the newspaper reported late Thursday.

Google has reportedly been courting the No. 2 wireless carrier for months to make its search engine the default on Verizon phones, but Verizon is considering both offers, according to the Journal's sources.

Microsoft showed its desire to move into Google's search territory earlier this year when it made a multibillion-dollar bid to buy Yahoo. Microsoft's latest salvo comes after Google bowed to federal regulators' opposition and killed its controversial advertising partnership with Yahoo.

Google's preoccupation with regulators over the Yahoo deal helped create the opening for Microsoft with Verizon, the sources told the newspaper.

The move comes as the two companies ramp up their efforts in the mobile arena. The first phone based on Google's Android mobile operating system--a challenger to Microsoft's Windows Mobile--recently went on sale. Microsoft CEO Steve Ballmer on Thursday dismissed Android, saying he believed that building it was financially unsound for Google.

"They can hire smart guys, hire a lot of people, blah dee blah dee blah, but you know they start out way behind, in a certain sense," he said.